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Is Energy Technique a solid growth stock? - The numbers tells it is

29 May 2014 • About Energy Technique ($ETQ) • By InTwits

Pay attention to Energy Technique as a growth stock. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.

Growth story


Energy Technique showed fast growth in the last financial year. Energy Technique's revenue surged on 26.7% in FY2014. Together with revenue growth Energy Technique also managed to keep EBITDA growth. EBITDA grew 141% for the same period.

In the longer period Energy Technique showed fast revenue growth of 18.2% from FY2011 to FY2014 annually. EBITDA surged on nan% from FY2011 to FY2014 annually.

Energy Technique ($ETQ) financials for the last 5 years

mln. £ FY2010 FY2011 FY2012 FY2013 FY2014
Revenue567810
Revenue growth, %10.2%22.6%6.4%26.7%
Gross margin, %26.5%25.7%28.1%27.1%34.6%
SG&A, %27.4%
EBITDA0-0001
EBITDA growth, %-1,133.3%-283.2%13.0%141.4%
EBITDA margin, %0.286%-2.68%4.00%4.25%8.10%
Net Income0-1001
Net Income margin, % 0.0571%-19.6%2.26%2.13%5.29%
 
CAPEX00000
CAPEX/Revenue, %1.01%0.449%1.18%0.358%0.366%
Debt00000
Cash10011
Net Debt/EBITDA-55.9x2.0x-1.2x-1.8x-1.1x
 
ROIC, %-2.6%-14.3%18.9%19.3%47.5%
ROE, %0.1%-60.7%12.0%11.0%32.4%

Profitability and return on investment


EBITDA growth was partly attributed to margin expansion. EBITDA margin surged on 3.80 pp from 4.30% to 8.10% in FY2014. In the last 3 years the company's EBITDA margin surged on 10.8 pp from -2.70% in FY2011 to 8.10% in FY2014.

Energy Technique shows attractive ROIC at 47.5% for the last 12 months which assumes stable development model. During the last three years it surged - it was -14.3% in FY2011. Average ROIC for the last three years was 28.6%.

Energy Technique showed fast Net Income margin growth of 3.20 pp from 2.10% to 5.30% in FY2014. If we look for the longer period the company's Net Income margin surged on 24.9 pp from -19.6% in FY2011 to 5.30% in FY2014.

Energy Technique operates at ROE of 32.4%. It's average ROE for the last three years was 18.5%.

Capital expenditures (CAPEX)


The company's CAPEX/Revenue was 0.366% in FY2014. The company's CAPEX/Revenue dropped on 0.0834 pp from 0.449% in FY2011 to 0.366% in FY2014. Average CAPEX/Revenue for the last three years was 0.636%.

Leverage (Debt)


Energy Technique has negative net debt at -1.1x Net Debt/EBITDA - at the same time with high growth. If we look for the longer period leverage dropped on 3.08x from 1.97x in FY2011 to -1.11x in FY2014.

Valuation vs. comparable companies


The market closed today at 4.6x EV/EBITDA for Energy Technique which is 71.1% lower than 16.0x Industrial Engineering peer group avearge calculated on the basis of 44 companies. The company trades at 8.8x P/E which is 3.65% lower than 9.1x Industrial Engineering industry avearge calculated based on 6 companies.

Peers in Industrial Engineering


Below we provide Energy Technique benchmarking against other companies in Industrial Engineering industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.

Top companies by Revenue growth, %

 FY2010 FY2011 FY2012 FY2013 FY2014
Top
Mitsubishi Electric Corp ($MEL)8.7%-0.2%-2.0%13.7%
Rotork ($76ID)13.0%2.8%
Renold ($RNO)-9.2%-3.3%
Chamberlin ($CMH)39.9%14.4%-7.3%-8.6%
 
Median (4 companies)24.3%7.1%-4.7%-0.2%
Energy Technique ($ETQ)10.2%22.6%6.4%26.7%


Top companies by Gross margin, %

 FY2010 FY2011 FY2012 FY2013 FY2014
Top
Rotork ($76ID)46.8%47.4%48.0%
Mitsubishi Electric Corp ($MEL)25.3%28.0%27.8%27.0%28.1%
Chamberlin ($CMH)15.7%18.7%19.5%19.1%15.9%
 
Median (3 companies)20.5%23.4%27.8%27.0%28.1%
Energy Technique ($ETQ)26.5%25.7%28.1%27.1%34.6%


Top companies by EBITDA margin, %

 FY2010 FY2011 FY2012 FY2013 FY2014
Top
Rotork ($76ID)27.0%27.6%28.0%
Mitsubishi Electric Corp ($MEL)6.4%9.3%9.7%7.9%9.1%
Renold ($RNO)8.1%-1.1%2.4%
Chamberlin ($CMH)0.7%4.4%6.3%5.5%-1.2%
 
Median (4 companies)3.6%6.9%8.9%6.7%5.8%
Energy Technique ($ETQ)0.3%-2.7%4.0%4.3%8.1%


Top companies by CAPEX/Revenue, %

 FY2010 FY2011 FY2012 FY2013 FY2014
Top
Mitsubishi Electric Corp ($MEL)3.3%3.0%4.4%4.2%3.7%
Renold ($RNO)1.8%1.6%3.3%
Rotork ($76ID)2.5%1.8%2.9%
Chamberlin ($CMH)1.8%2.6%2.6%3.2%2.6%
 
Median (4 companies)2.5%2.8%2.5%2.5%3.1%
Energy Technique ($ETQ)1.0%0.4%1.2%0.4%0.4%


Top companies by ROIC, %

 FY2010 FY2011 FY2012 FY2013 FY2014
Top
Rotork ($76ID)50.0%45.4%38.1%
Mitsubishi Electric Corp ($MEL)5.8%14.3%13.1%8.2%11.9%
Renold ($RNO)18.8%-12.7%-2.5%
Chamberlin ($CMH)-9.2%5.0%15.7%10.7%-21.5%
 
Median (4 companies)-1.7%9.6%17.2%9.5%4.7%
Energy Technique ($ETQ)-2.6%-14.3%18.9%19.3%47.5%


Top companies by Net Debt / EBITDA

 FY2010 FY2011 FY2012 FY2013 FY2014
Top
Renold ($RNO)1.3x5.4x
Mitsubishi Electric Corp ($MEL)0.8x0.1x0.5x1.0x-0.1x
Rotork ($76ID)-0.4x-0.4x-0.2x
 
Median (3 companies)8.7x0.9x0.5x0.4x-0.1x
Energy Technique ($ETQ)-55.9x-1.2x-1.8x-1.1x


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